Subsequent Event

Merger Agreement with Berkshire Hathaway and 3G Capital

On February 13, 2013, the Company entered into the Merger Agreement with Parent and Merger Subsidiary. The terms of the Merger Agreement were unanimously approved by the Company's Board of Directors on February 13, 2013 and by the majority of votes cast at a special shareholder meeting on April 30, 2013. In addition, all required regulatory approvals were obtained in the U.S. and all applicable non-U.S. jurisdictions. The acquisition was consummated on June 7, 2013, and as a result, Merger Subsidiary merged with and into the Company, with the Company surviving as a wholly owned subsidiary of Parent. Parent is controlled by the Sponsors. Upon the completion of the Merger, the Company's shareholders received $72.50 in cash for each share of common stock. The total aggregate value of the acquisition consideration was approximately $28.75 billion, including the assumption of the Company's outstanding debt.

The cash consideration was funded from equity contributions from the Sponsors and cash of the Company, as well as proceeds received by Merger Subsidiary in connection with debt financing provided by JPMorgan Chase Bank, N.A., Wells Fargo Bank, National Association and a syndicate of other lenders pursuant to a new senior secured credit facility (the “Senior Credit Facilities”).


•	$9.5 billion in senior secured term loans, with tranches of 6 and 7 year maturities and fluctuating interest rates based on, at the Company's election, base rate or LIBOR plus a spread on each of the tranches, with respective spreads ranging from 125-150 basis points for base rate loans with a 2% base rate floor and 225-250 basis points for LIBOR loans with a 1% LIBOR floor,


•	$2.0 billion senior secured revolving credit facility with a 5 year maturity and a fluctuating interest rate based on, at the Company's election, base rate or LIBOR, with respective spreads ranging from 50-100 basis points for base rate loans and 150-200 basis points for LIBOR loans, on which nothing is currently drawn, and


•	$3.1 billion of 4.25% secured second lien notes with a 7.5 year maturity which are required to be exchanged within one year of consummation of the Merger Agreement for registered notes.

On June 7, 2013, this indebtedness was assumed by the Company, substantially increasing the Company's overall level of debt.

In the Merger, (i) each outstanding share of Company common stock (other than shares owned by the Company, Parent, Merger Sub or any other direct or indirect wholly owned subsidiary of Parent, and in each case not held on behalf of third parties) was cancelled and automatically converted into the right to receive $72.50 in cash, without interest and less applicable withholding taxes thereon (the “Merger Consideration”), (ii) each outstanding stock option, whether vested or unvested, was cancelled and automatically converted into the right to receive, with respect to each share subject to the option, the Merger Consideration less the exercise price per share, (iii) each outstanding Company phantom unit, whether vested or unvested, was cancelled and automatically converted into the right to receive the Merger Consideration, and (iv) each outstanding Company restricted stock unit (other than retention restricted stock units, which will remain subject to the vesting schedule pursuant to the existing terms of the applicable award agreements and that the general timing of payment would be in accordance with such terms), whether vested or unvested, was cancelled and automatically converted into the right to receive, with respect to each share subject to the restricted stock unit, the Merger Consideration plus any accrued and unpaid dividend equivalents, except that payment in respect of Company restricted stock units that have been deferred will be made in accordance with the terms of the award and the applicable deferral election made by the holder.

At the effective time of the Merger, each holder of a certificate formerly representing any shares of Company common stock or of book-entry shares no longer had any rights with respect to the shares, except for the right to receive the Merger Consideration upon surrender thereof.

The Company may take any action it deems necessary or appropriate to cause, in accordance with the terms of the Merger Agreement, the vesting of any unvested amounts under the Supplemental Executive Retirement Plan and the Employees Retirement and Savings Excess Plan. The Company intends to terminate and payout these two plans, as well as the Executive Deferred Compensation Plan , the Deferred Compensation Plan for Directors, the Deferred Compensation Plan for Non-Employee Directors and certain non-US non-qualified deferred compensation plans, within one year following the closing of the merger.

The acquisition will be accounted for as a purchase business combination. The application of purchase accounting as of the closing date is expected to have a material effect on the Company's results of operations for periods after the acquisition. The Company has begun the process to determine the purchase accounting allocation to the Company's assets and liabilities including estimating fair values of the Company's intangible and tangible assets. While these estimates have not been completed, management expects that a substantial portion of the purchase price will be allocated to indefinite-lived intangible assets (principally brands) and goodwill.

Financing implications of the acquisition on our existing debt

A substantial portion of the Company's indebtedness was subject to acceleration upon a change of control or required the Company to offer holders the option to repurchase such indebtedness from such holders (assuming such change of control triggered certain downgrades in the ratings of the Company's debt). Certain of the Company's outstanding indebtedness at April 28, 2013 that was not subject to acceleration upon a change of control and that either did not contain change of control repurchase obligations or where the holders did not elect to have such indebtedness repurchased in a change of control offer remain outstanding.

On March 13, 2013, the Company launched a consent solicitation relating to the 7.125% Notes due 2039 seeking a waiver of the change of control provisions as applicable to the Merger Agreement. As of March 21, 2013, the Company received the required consents to waive such provisions and as a result those notes remain outstanding.